Homegrown e-commerce major Flipkart Pvt. Ltd has committed to infuse $500 million (Rs 3,254 crore) into its payments arm PhonePe, the company said.
Phonepe CEO Sameer Nigam said the money will be used to scale up the company’s technology platform, besides expanding its merchant network and consumer base. The company has also set a target of 25 billion digital payments by next year.
“PhonePe is a critical part of our overall strategy to build a comprehensive ecosystem for our customers. We are fully committed to make PhonePe the most preferred digital payments app in India,” said Flipkart CEO Binny Bansal.
The parent company has so far invested $75 million into Phonepe, formerly FX Mart Pvt Ltd, since it was acquired in 2015.
Earlier this month, PhonePe had received an infusion of $38.7 million.
In August, Flipkart had received $2.5 billion from marquee investor SoftBank and another $1.4 billion from Microsoft, Tencent and eBay Inc in April.
PhonePe is rapidly scaling up its operations following impressive growth numbers in recent times. The company had claimed to have overtaken Bharat Interface for Mobile (BHIM) app in terms of total transactions with a 45% share in August. Likewise, its monthly transactions, which grew 800% since December 2016, translated into an annual payment volume of $2.5 billion in July.
Nigam said the company is growing nearly 100% every two months. The PhonePe app has about 25,000 offline merchants and 100 billers. It has integrated around 30 of the top 100 online merchants on its app
Rahul Chari, the co-founder and CTO of PhonePe, had earlier told VCCircle that it was clocking 10 million transactions every month and hoped to double it soon.
It was also working on the launch of a more seamless payments solution with UPI 2.0, which will have the ability to create e-mandates, or standing instructions, besides foraying into wealth management as well as in cross-selling and up-selling of financial products.
Though PhonePe was a rather late entrant into the payments space, it was one of the earliest adopters of the UPI-based transaction platform. However, payments, as a sector is still maturing and there have been no well-defined rules as yet to pick out a clear market leader.
For Flipkart, PhonePe solves a crucial piece of puzzle in addressing the problem with an integrated payments solution that is also seamless. Industry experts, however, believe that wallets will continue to remain a significant part of Flipkart, Amazon and Paytm’s strategy to acquire and retain consumers.
VCCircle had earlier reported that Flipkart’s deep pocketed rival Amazon was also all set to pump in fresh funds into Amazon Pay, its payments arm.